ALJDEC decisions subject to certification as final
2022A-02162-CHC-ROC · Registrar of Contractors · 2022-12-07
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Haerin Hong,
COMPLAINANT,
v.
Drake Development Inc.
ROC License No. 087094,
RESPONDENT.
No. 2022A-02162-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: December 02, 2022 at 9:00 AM.
APPEARANCES: Haerin Hong (“Complainant”) appeared on her own behalf. Douglas Barrett appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Richard Drake appeared on behalf of Drake Development Inc. (“Respondent”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
_____________________________________________________________________
Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).
FINDINGS OF FACT
Background and Procedure
Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On July 25, 1990, the Registrar issued License No. 087094 General Residential B contracting license to Respondent. The license is in good standing and has been renewed through June 30, 2023. Richard Robert Drake is listed as the Qualifying Party/Officer on the license, along with Dianne Lee Drake who is also listed as an Officer. Respondent’s address of record for the license is 5429 E. Beryl Ave. Paradise Valley, AZ 85253. Respondent has an active $9,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective February 12, 2019. The license has not been previously disciplined by the Registrar. There is one (1) open complaint against the license, which is presumed to be related to this matter.
On or about March 25, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 087094 alleging abandonment and poor workmanship regarding a home inspection repair project. The Registrar designated it Complaint No. 2022-2162 and assigned to Doug Barrett (“Investigator Barrett ”) for investigation.
On March 28, 2022, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Barrett on April 21, 2022, at 10:00 a.m.
On April 21, 2022, Investigator Barrett inspected the work that had been done on the project to date. He also took 16 photographs of the project. When he was finished, Investigator Barrett drafted Jobsite Inspection Notes. Ultimately, Investigator Barrett determined that Complaint No. 2022-02162 contained eleven (11) separate and distinct complaint items, of which he substantiated 2. Specifically, Investigator Barrett determined that complaint items 3-4 and 9 constituted poor or incomplete work, and failed to meet the Registrar’s minimum workmanship standards.
On April 22, 2022, Investigator Barrett issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 13, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).
On August 17, 2022, Investigator Barrett issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 31, 2022, at 10:00 a.m.
On August 31, 2022, inspected the corrective work that had been performed on the project and took 4 photographs. When he was finished, Investigator Barrett drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Barrett determined that Respondent had satisfactorily remediated complaint items 4 and 9, but that Respondent had not performed corrective work necessary to remediate complaint item 3.
On September 09, 2022, Investigator Barrett escalated Complaint No. 2022-02162 to the Registrar’s legal department with citation recommendations for violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22).
On September 21, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until October 07, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155.
On or about October 05, 2022, the Registrar received Respondent’s timely written Answer. Respondent offered the following explanation, in pertinent parts:
When [Complainant] purchased the home on Orchid, [she] had a home inspection done ... by Alosio Home Inspection LLC. [The report] listed a numerous deficiencies from which [Complainant] selected the items [she] wanted addressed.
[R]egarding the GFCI: On [Investigator] Barrett’s last inspection on August 31, 2022, when it was noted the GFCI didn’t work, he indicated he wasn’t going to send this to legal. He wanted the repair completed by September 9, 2022.
Again, I want to reiterate that [Respondent] never worked on this. I showed her where to turn the switch on so it would operate properly. That is all that was done. It seems this has become a maintenance issue that I shouldn’t be responsible for.
However, wanting to determine what was wrong with the GFCI, I contacted [Complainant] the next day to schedule an appointment. She provided the date of September 14, 2022, at 8:30 AM to which I agreed and confirmed. On September 13, 2022, at 5:11 PM, I received a cancellation notice from her.
[Respondent] set up another date and time with her on September 19, 2022, at 8:30 AM which I agreed and confirmed. On September 19, 2022, at 6:15 AM she again cancelled.
On October 17, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on December 02, 2022. Per the October 27, 2022, Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges:
Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)
Charge 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf, called Investigator Barrett as a witness, and submitted Exhibits 4-8 and 12-13. Richard Drake testified on behalf of Respondent. The Registrar’s agency file (“Agency File”), including the Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:
Complainant owns residential property located at 5350 E. Orchid Ln.. Paradise Valley, AZ 85253.
On or about November 06, 2020, Complainant had a home inspection performed for the underlying residential property at issue, which she was intent on purchasing at the time. The resulting report identified 96 items suggested for replacement or repair.
On December 15, 2020, the parties entered into a $9,387.26 contract for Respondent to address the electrical, plumbing, HVAC, and roofing issues raised in the home inspection report.
On December 17, 2020, Complainant paid the contract in full.
The Directive’s compliance period was extended twice. On May 25, 2022, an Amended Directive was issued that extended the compliance period through June 08, 2022. Upon expiration, the parties agreed to extend the compliance deadline for a final time through and until September 09, 2022, to afford Respondent additional time to address substantiated compliant item 3.
Although Respondent made attempts to correct compliant item 3, and did observe intermittent functionality during remediations, the GFCI component was not working correctly during Investigator Barrett’s jobsite inspection or compliance jobsite inspection.
Closing Arguments
In closing, Respondent opined that because the GFCI was working appropriately the last time he observed it, that something must have happened between his departure and Investigator Barrett’s inspection that caused it fail. As such, Respondent argued that discipline was not warranted by the Registrar.
In closing, Complainant argued that Respondent had ample opportunity, given the two extensions he received, to perform all corrective work required by the Registrar’s Directive. Complainant opined that discipline was warranted, as Respondent’s failure to remediate complaint item 3 would require her to address it further at her own expense.
CONCLUSIONS OF LAW
The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.
The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.
The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.
Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.
“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”
Ariz. Admin. Code R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”
Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”
The material facts in the case at bar are not in dispute.
It is undisputed that the parties had a contract for Respondent to address multiple issues identified in Complainant’s home inspection report, for which Complainant tendered payment in full. It is also undisputed that Respondent did not fully complete the project per the terms of the underlying contract, as some of the work Respondent performed failed to satisfy minimum workmanship standards set by the Registrar. It is further undisputed that Respondent did not perform all corrective work as identified in the Registrar’s Amended Directive, despite multiple extensions.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Moreover, the record clearly reflects that Respondent did not refund any monies Complainant paid towards the completion of the underlying project.
Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.
Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Drake Development Inc., ROC License No. 087094, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).
In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification.
Done this day, December 07, 2022.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Drake Development Inc., Respondent
5429 E Beryl Ave.
Paradise Valley, AZ 85253
[email redacted]
Haerin Hong, Complainant
5350 E. Orchid Ln.
Paradise Valley, AZ 85253
[email redacted]
By: Miranda Alvarez
Legal Secretary